The necessity of purpose-built technology in supply chain resilience

Brand manufacturing supply chains, particularly those functioning within the food and beverage, pharmaceutical, and over-the-counter sectors, are currently facing significant challenges due to market volatility. Kevin Wong, Chief Operating Officer of Nulogy, addressed these pressing concerns in an article published in Industry Today. He highlighted the numerous disruptions that threaten supply chains, which stem from geopolitical conflicts, economic fluctuations, shifting consumer demands, and climate change.

At the core of these issues is the increasing complexity faced by brand manufacturers, many of whom outsource up to 30% of their innovation and go-to-market strategies to external partners such as co-packers, contract manufacturers, and logistics services. According to Wong, this reliance complicates the coordination and visibility required to mitigate associated risks, making it essential for manufacturers to adapt efficiently.

Wong further critiques the current state of supply chain management technology, arguing that the status quo, which relies on general-purpose solutions such as monolithic ERP packages, is inadequate for addressing industry-specific needs. He outlines several drawbacks of this approach, including a lack of purpose-built capabilities, high implementation costs, and an inability to scale or adapt quickly to market changes. “Enterprise planning solutions are often ‘stretched’ beyond their primary function of business planning to encompass supplemental functions such as supply chain management,” Wong noted.

The financial implications of large ERP systems are considerable, with extensive implementations often taking years to complete and a slow return on investment. Furthermore, Wong emphasizes that as supply chains constantly evolve, flexibility and interoperability emerge as critical requirements that generic software solutions fail to deliver.

Instead, he advocates for the adoption of purpose-built technologies that can foster resilience and agility in supply chains. He asserts that these specialised solutions provide the necessary speed to value, tailored expertise, and scalability vital for businesses in today’s dynamic marketplace. “The future of supply chain technology is widely envisioned as an ecosystem of interoperable, purpose-built solutions,” Wong explained, citing David Warrick, former General Manager of Global Supply Chain at Microsoft, who describes this new paradigm as “Supply Chain as a Service.”

These purpose-built solutions are designed to be implemented quickly, usually within a two to three-month timeframe, as opposed to the protracted periods typically associated with traditional systems. Such speed allows companies to pilot smaller projects that can demonstrate value swiftly, thereby encouraging broader adoption. Moreover, because these systems often require little to no customisation, organisations can free up internal resources to focus on strategic initiatives rather than merely maintaining technology.

The agility of purpose-built solutions also lends itself to scalability, enabling businesses to adapt effectively to future growth. Wong’s article posits that equipping supply chains with flexible technologies can lead to sustained competitive advantage in an arena marked by frequent disruption.

As businesses confront ongoing uncertainty in supply chains, Wong’s insights underscore the need to transition towards solutions that can enhance agility and resilience. By moving beyond generic systems, brand manufacturers can potentially transform disruptions into opportunities for growth.

Source: Noah Wire Services